FM Nirmala Sitharaman presented India’s annual budget today and announced a slew of attractive incentives and rebates, measures to bolster infrastructure and the highest ever outlay in railways. Overall, everyone helmed the budget as a growth-oriented, progressive budget.
Given the focus on tourism with 50 tourist destinations being developed as a whole package for domestic and international tourism, hotel stocks like Indian Hotels, EIH Ltd, Lemon Tree surged in trade. As no exemption was given on proceeds of insurance policies with a premium of more than Rs. 5 lakhs, all life insurer stocks tanked in trade. ICICI Prudential Life, HDFC Life declined over 10% each, while SBI Life and LIC closed 9% and 8.4% lower, respectively. The announcements for the defence sector were a tad bit negative as the defence budget for FY24 at Rs 4.33 lakh cr was only 6% higher against market expectations of over 15% growth. Consequently, the 4%+ fall in HAL, Mazagon Dock, Cochin Shipyard, GRSE and BEL came as no surprise.
With the Budget cheer, Nifty climbed to a high of 17,972.20. But soon after, the market lost steam and tanked in trade, snapping a 2-day gaining streak. 27 out of 50 Nifty constituents declined in trade today with Adani Enterprises (down over 28%) and Adani Ports (down over 19%) being the top draggers. Despite its attempt to recover in the last hour of trade, Nifty closed the session ~350 points lower than the day’s high.
Similarly, Nifty Bank ended this choppy session in the red with Bank of Baroda & PNB leading the declines. It crossed the 42,000-mark intraday bolstered by the budget but closed ~1500 points below the day’s high.
The broader markets underperformed Nifty by declining ~1% each in trade today. All sectoral indices closed in the red barring the FMCG & IT Index. Nifty FMCG Index advanced over 1% in trade led by ITC, Varun Beverages. ITC particularly had dipped in trade during the course of the budget, but as finer details emerged, it pulled off a recovery of ~10% from the day’s low. Nifty IT Index was also seen bucking the trend by advancing ~0.9% in trade led by TCS and Infosys.
On the flipside, Nifty PSU Bank Index slipped ~7% from the day’s high to post the worst decline since Dec 23, 2022. All constituents of the PSU Bank Index slipped in trade with Bank of Baroda & Canara Bank leading the decline. Nifty Metal Index too posted a steep fall of ~6% from the day’s high, to end the day in the red. Adani Enterprises & Hind Copper were the top draggers.
So, all in all, despite the optimism surrounding the budget, markets ended this choppy trading session in the red, much to the disappointment of investors.
